A wunderkind in middle age: Dell tries to turn back the clock.

Dell was huge. Back in 2001 it had a 12.8 per cent share of the global computing market as it overtook Compaq to become the biggest PC maker on the planet. But 2001 is aeons ago in computing terms and Dell's star first began to fade and then to fall as the company failed to take full cognisance of changing times and changing technologies.

In recent years Dell has spent more than $13 billion on a variety of acquisitions, none have which has set the world on fire. A lot of money has been spent with little to show for it. Simultaneously, Dell's own stock has fallen and is worth just 23 per cent of what it was in 2000.

That said, Dell is still big, massive even, but some of the magic dust has rubbed-off of late. Somehow the company missed the boat when consumer interest turned away from desktops and laptops to smartphones and tablet devices. To make matters worse, Dell also failed to capitalise on a once-in-a-lifetime opportunity when the corporate computing sector transferred allegiance to data centres and the cloud.

But even as he watched his company decline from its apogee, Michael Dell vowed to do something about it. So, spurred by new determination to rescue his brainchild from mediocrity and a lingering death, Michael Dell wants to buy back the company that went to IPO in June 1988. He is working on a leveraged buyout with Silver Lake Partners and (ironically) with some additional funding from Microsoft.

Dell's idea is to take the company back into private hands and re-apply the formula that worked so well the first time round. Back then, Michael Dell calculated that he could make good margins by assembling PC's to individual customer specification. For example, consumers could choose how much memory they wanted, how big a hard drive, screen size and so on. Once the order was placed Dell assembled the components into a case and shipped them. It was popular and profitable.

Now, almost a generation later, Dell wants to try that ploy again, this time by selling key components of cloud computing (networking, servers, storage) together with the software to manage it all.

It's a brave idea, but will the magic work twice? Dell still seems to be all at sea as far as any coherent mobile strategy is concerned and Michael Dell himself admits that if his plan is adopted, it will be a long haul for investors as revenues will fall for an unknown but sustained period and that will drive down the stock price.

Tomorrow, Thursday, July 18, Dell shareholders will vote on whether to accept his offer of US$13.65 a share, or $24.4 billion, for the company. It will be a difficult decision to make, and, of course, and as usual, something of a gamble.

A major opponent of the plan is the corporate raider Carl Icahn who says Michael Dell is trying to buy the company on the cheap. Mr. Icahn contends that Dell itself should buy a billion of its own shares (at $14 a pop) and change its board (well, he would say that, wouln't he?).

In the meantime Mr. Icahn has upped his counter-bid to between $15.50 and $18 a share. "Dell is a valuable company", he says, adding, "PCs are changing, but they aren't going away."

In response, Dell and Silver Lake say they have made their definitive offer, are sticking to it and won't be upping the ante. It's a gamble. They face some serious opposition tomorrow and there is a real possibility that the deal will fall.

That would result in a long drawn-out battle of attrition as proxies slug it out for control of the company even as company shares begin to fall further. Wall St. analysts say that if Dell's plan fails Dell's share price will probably collapse and fall to somewhere between $5.85 and $8,67 a share. That would put the company valuation in the same bracket as HP - and open up a whole new can of worms.

Michael Dell says he is prepared for such an eventuality and will hunker down in the trenches and do his bit if that becomes necessary.

It is hard to gauge why Micheal Dell is doing all this. He is already fabulously wealthy (estimates put his personal fortune at somewhere between $15 and $18 billion) and he enjoys the good life. Perhaps he does have a vision and the drive to grab Dell by the scruff of the neck and shake it out of its torpor. Perhaps he's bored and wants a project. Or, perhaps, he is getting early intimation of mortality, or of the mortality of the company he founded, at any rate, and wants to ensure that Dell endures into the forseeable future. He wants a corporate legacy.

The trouble is, as the old saying has it, "You can't bathe in the same river twice". In other words, things have changed, time has passed, bones grow old and nothing lasts forever.

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